BMC slumps on first-quarter warning

SAN FRANCISCO (CBS.MW) -- BMC Software shares fell 15 percent Thursday after the company lowered it first-quarter revenue and profit outlook due to delays in customers' purchasing decisions.

BMC
BMC, +0.00%
slumped $2.51 to close at $14.16 after saying on Wednesday it expects to post earnings, excluding charges, of between 11 cents and 14 cents a share on $318 million to $328 million in revenue for the first quarter.

The company had earlier estimated it would earn between 12 cents and 16 cents a share on revenue in a range of $345 million to $355 million.

The Houston-based company, which makes infrastructure-management software, estimates that license bookings will be down 20 percent to 26 percent from the same period a year ago. License bookings are considered a major part of a software company's health because they show how many new deals a company is signing.

Analysts said BMC's deals are not necessarily specific to the company's business efforts, but symptomatic of the entire business-software market.

"Like other software companies, North American big deals were delayed," said Piper Jaffray analyst David Rudow in a research note. "This is a consistent theme we have heard from many other vendors this quarter."

Rudow maintained his "market perform" rating on BMC's stock, but lowered his estimates for the company's 2005 and 2006 fiscal years.

However, First Albany analyst Damian Rinaldi lowered his rating on BMC to "neutral" from "buy," saying that "besides the miss, the company's reliance on large deals, potential for increased competition, summer seasonality" and integration of its Marimba purchase create too many issues to be resolved for the time being.

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